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A Bayesian look at American academic wages: From wage dispersion to wage compression

Abstract : OECD countries have experienced a large increase in top wage inequality. Atkinson (2008) attributes this phenomena to the superstar theory leading to a Pareto tail in the wage distribution with a low Pareto coefficient. Do we observe a similar phenomena for academic wages? We examine wage formation in a public US university using for each academic rank a hybrid mixture formed by a lognormal distribution for regular wages and a Pareto distribution for top wages, using a Bayesian approach. The presence of superstars wages would imply a higher dispersion in the Pareto tail than in the lognormal body. We concluded that academic wages are formed in a different way than other top wages. There is an effort to propose competitive wages to some young Assistant Professors. But when climbing up the wage ladder, we found a phenomenon of wage compression which is just the contrary of a superstar phenomenon.
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https://hal-amu.archives-ouvertes.fr/hal-02566630
Contributor : Elisabeth Lhuillier <>
Submitted on : Thursday, May 7, 2020 - 11:04:42 AM
Last modification on : Thursday, July 30, 2020 - 7:11:23 PM

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Majda Benzidia, Michel Lubrano. A Bayesian look at American academic wages: From wage dispersion to wage compression. Journal of Economic Inequality, Springer Verlag, 2020, 18 (2), pp.213-238. ⟨10.1007/s10888-019-09431-9⟩. ⟨hal-02566630⟩

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